Stock market data systems
Encyclopedia
Stock market data systems communicated market data
—information about securities and stock trades—from stock exchange
s to stock broker
s and stock trader
s.
s and traveled by courier
. In the early 19th century Reuters
sent data by carrier pigeon
s between Germany and Belgium In London early exchanges were located near coffee houses which may have played a part in trading.
The New York Stock Exchange
is known as the "Big Board", perhaps because of these large chalk boards. Until recently, in some countries such chalkboards continued in use. Morse code
was used in Chicago until 1967 for traders to send data to clerks called "board markers".
.
In 1884 the Dow Jones company published the first stock market averages, and in 1889 the first issue of the Wall Street Journal appeared. As time passed, other newspapers added market pages. The New York Times was first published in 1851, and added stock market tables at a later date.
s, bond
s, and commodities to be sent directly from exchanges to broker offices around the country. It printed the data on 0.75 inches (1.9 cm) wide paper tape wound on large reels. The sound it made while printing earned it the name "stock ticker". Other inventors improved on this device, and ultimately Thomas Edison
patented a "universal stock ticker", selling over 5,000 in the late 19th century.
In the early 20th century Western Union
acquired rights to an improved ticker which could deal with the increasing volume of stocks sold per day.
At the time of the stock market crash
in October, 1929, trading volumes were so high that the tickers fell behind, contributing to the panic. In the 1930s the New York Quotation Stock Ticker became widely used. A further improvement was in place in 1960.
In 1923 Trans Lux Corporation delivered a rear projection system which projected the moving ticker onto a screen where all in a brokerage office could see it. It was a great success, and by 1949 there were more than 1400 stock-ticker projectors in the U.S. and another 200 in Canada.
In 1959 they started shipping a Trans-Video system called CCTV which gave a customer a small video desk monitor where he could monitor the tickers.
Competition, including Ultronics' Lectrscan electron wall system, led Trans-Lux to introduce the Trans-Luix Jet. Jets of air controlled lighted disks which moved on a belt on the broker's wall. Brokers ordered over 1000 units in the first six months, and by the middle of 1969 more than 3000 were in use in the U.S. and Canada.
The information included the previous day’s closing price, opening price, high for the day, low for the day, and current price. Teleregister offered data from the New York, American
, Midwest, Chicago Mercantile
, Commodity, New York Cocoa, New York coffee and sugar, New York Mercantile
, New York Produce, New York Cotton, and New Orleans Cotton exchanges, along with the Chicago Board of Trade
.
Some firms had a battery of telephone operator
s seated in front of a Teleregister board to supply commission houses with price and volume data. In 1962 two such batteries handled over 39,000 calls per day.
In 1955 Scantlin Electronics, Inc. introduced a competitive display system very similar in appearance but with digits twice the size of Teleregister’s, fitting into the same board area. It was less expensive and soon was installed in many broker offices.
storage unit that could be sited at a brokerage and Desk Units with a keyboard and printer. The storage unit recorded the data from the ticker line. Brokers could enter the stock symbol on a desk unit. This triggered a backward search on the magnetic tape (which continued recording incoming ticker data). When a transaction was located, the price was sent to the desk unit, which printed it on a tape.
The first Quotron units were installed in 1960, and were an immediate success. By the end of 1961 brokers were leasing Quotrons in some 800 offices, serving some 2,500 desk units across the United States.
Sinn formed Ultronic Systems Corp. in January 1961. By the fall of that year Ultronics installed its first units in New York and Philadelphia, followed by San Francisco and Los Angeles. Ultimately Ultronics and General Telephone (which bought Ultronics in 1967) installed some 10,000 units world-wide.
Scantlin Electronics reacted immediately to the Ultronic threat. In early 1962 they began work on their own computer-based system and put it into service in December, 1962. It used four Control Data 160A computers in New York which recorded trading data in magnetic core memory
. Major cities hosted Central Office equipment connected to newly-designed Quotron II desk units in brokerage offices on which a broker could request, for any stock, price and net change from the opening, or a summary which included highs, lows, and volumes (later SEI added other features like dividends and earnings). The requests went to a Central Office, which condensed and forwarded them to the New York computer. Replies followed the sequence in reverse. The data was transmitted on AT&T's Dataphone high-speed telephone service. In 1963 the new system was accepted by many brokers, and was installed in hundreds of their offices.
At the end of each day, this same system transmitted stock market pages to United Press International, which in turn sold them to its newspaper customers all over the world.
Over the years other companies wrote personal computer programs in competition with PC Plus, but they all dropped out along the way.
, CarryQuote
, and Delta Stream.
Market data
In finance, market data is quote and trade-related data associated with equity, fixed-income, financial derivatives, currency, and other investment instruments. Market data is numerical price data, reported from trading venues, such as stock exchanges...
—information about securities and stock trades—from stock exchange
Stock exchange
A stock exchange is an entity that provides services for stock brokers and traders to trade stocks, bonds, and other securities. Stock exchanges also provide facilities for issue and redemption of securities and other financial instruments, and capital events including the payment of income and...
s to stock broker
Stock broker
A stock broker or stockbroker is a regulated professional broker who buys and sells shares and other securities through market makers or Agency Only Firms on behalf of investors...
s and stock trader
Stock trader
A stock trader or a stock investor is an individual or firm who buys and sells stocks in the financial markets. Many stock traders will trade bonds as well...
s.
History
The earliest stock exchanges were in France in the 12th century and in Bruges and Italy in the 13th. Presumably data about trades in those times was written down by scribeScribe
A scribe is a person who writes books or documents by hand as a profession and helps the city keep track of its records. The profession, previously found in all literate cultures in some form, lost most of its importance and status with the advent of printing...
s and traveled by courier
Courier
A courier is a person or a company who delivers messages, packages, and mail. Couriers are distinguished from ordinary mail services by features such as speed, security, tracking, signature, specialization and individualization of express services, and swift delivery times, which are optional for...
. In the early 19th century Reuters
Reuters
Reuters is a news agency headquartered in New York City. Until 2008 the Reuters news agency formed part of a British independent company, Reuters Group plc, which was also a provider of financial market data...
sent data by carrier pigeon
Carrier pigeon
A carrier pigeon is a homing pigeon that is used to carry messages. Using pigeons to carry messages is generally called "pigeon post". Most homing or racing type varieties are used to carry messages. There is no specific breed actually called "carrier pigeon"...
s between Germany and Belgium In London early exchanges were located near coffee houses which may have played a part in trading.
Chalk boards
In late 1860s New York, young men called “runners” carried prices between the exchange and broker’s offices, and often these prices were posted by hand on large chalk boards in the offices.The New York Stock Exchange
New York Stock Exchange
The New York Stock Exchange is a stock exchange located at 11 Wall Street in Lower Manhattan, New York City, USA. It is by far the world's largest stock exchange by market capitalization of its listed companies at 13.39 trillion as of Dec 2010...
is known as the "Big Board", perhaps because of these large chalk boards. Until recently, in some countries such chalkboards continued in use. Morse code
Morse code
Morse code is a method of transmitting textual information as a series of on-off tones, lights, or clicks that can be directly understood by a skilled listener or observer without special equipment...
was used in Chicago until 1967 for traders to send data to clerks called "board markers".
Newspapers
From 1797 to 1811 in the United States, the New York Price Current was first published. It was apparently the first newspaper to publish stock prices, and also showed prices of various commoditiesCommodity
In economics, a commodity is the generic term for any marketable item produced to satisfy wants or needs. Economic commodities comprise goods and services....
.
In 1884 the Dow Jones company published the first stock market averages, and in 1889 the first issue of the Wall Street Journal appeared. As time passed, other newspapers added market pages. The New York Times was first published in 1851, and added stock market tables at a later date.
Ticker tape
In 1863 Edward A. Calahan of the American Telegraph Company invented a stock telegraph printing instrument which allowed data on stockStock
The capital stock of a business entity represents the original capital paid into or invested in the business by its founders. It serves as a security for the creditors of a business since it cannot be withdrawn to the detriment of the creditors...
s, bond
Bond (finance)
In finance, a bond is a debt security, in which the authorized issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay interest to use and/or to repay the principal at a later date, termed maturity...
s, and commodities to be sent directly from exchanges to broker offices around the country. It printed the data on 0.75 inches (1.9 cm) wide paper tape wound on large reels. The sound it made while printing earned it the name "stock ticker". Other inventors improved on this device, and ultimately Thomas Edison
Thomas Edison
Thomas Alva Edison was an American inventor and businessman. He developed many devices that greatly influenced life around the world, including the phonograph, the motion picture camera, and a long-lasting, practical electric light bulb. In addition, he created the world’s first industrial...
patented a "universal stock ticker", selling over 5,000 in the late 19th century.
In the early 20th century Western Union
Western Union
The Western Union Company is a financial services and communications company based in the United States. Its North American headquarters is in Englewood, Colorado. Up until 2006, Western Union was the best-known U.S...
acquired rights to an improved ticker which could deal with the increasing volume of stocks sold per day.
At the time of the stock market crash
Stock market crash
A stock market crash is a sudden dramatic decline of stock prices across a significant cross-section of a stock market, resulting in a significant loss of paper wealth. Crashes are driven by panic as much as by underlying economic factors...
in October, 1929, trading volumes were so high that the tickers fell behind, contributing to the panic. In the 1930s the New York Quotation Stock Ticker became widely used. A further improvement was in place in 1960.
In 1923 Trans Lux Corporation delivered a rear projection system which projected the moving ticker onto a screen where all in a brokerage office could see it. It was a great success, and by 1949 there were more than 1400 stock-ticker projectors in the U.S. and another 200 in Canada.
In 1959 they started shipping a Trans-Video system called CCTV which gave a customer a small video desk monitor where he could monitor the tickers.
Competition, including Ultronics' Lectrscan electron wall system, led Trans-Lux to introduce the Trans-Luix Jet. Jets of air controlled lighted disks which moved on a belt on the broker's wall. Brokers ordered over 1000 units in the first six months, and by the middle of 1969 more than 3000 were in use in the U.S. and Canada.
Automatic quotation boards
A quotation board is a large vertical electronic display located in a brokerage office, which automatically gives current data on stocks chosen by the local broker. In 1929 the Teleregister Corporation installed the first such display, and by 1964 over 650 brokerage offices had them.The information included the previous day’s closing price, opening price, high for the day, low for the day, and current price. Teleregister offered data from the New York, American
American Stock Exchange
NYSE Amex Equities, formerly known as the American Stock Exchange is an American stock exchange situated in New York. AMEX was a mutual organization, owned by its members. Until 1953, it was known as the New York Curb Exchange. On January 17, 2008, NYSE Euronext announced it would acquire the...
, Midwest, Chicago Mercantile
Chicago Mercantile Exchange
The Chicago Mercantile Exchange is an American financial and commodity derivative exchange based in Chicago. The CME was founded in 1898 as the Chicago Butter and Egg Board. Originally, the exchange was a non-profit organization...
, Commodity, New York Cocoa, New York coffee and sugar, New York Mercantile
New York Mercantile Exchange
The New York Mercantile Exchange is the world's largest physical commodity futures exchange. It is located at One North End Avenue in the World Financial Center in the Battery Park City section of Manhattan, New York City...
, New York Produce, New York Cotton, and New Orleans Cotton exchanges, along with the Chicago Board of Trade
Chicago Board of Trade
The Chicago Board of Trade , established in 1848, is the world's oldest futures and options exchange. More than 50 different options and futures contracts are traded by over 3,600 CBOT members through open outcry and eTrading. Volumes at the exchange in 2003 were a record breaking 454 million...
.
Some firms had a battery of telephone operator
Telephone operator
A telephone operator is either* a person who provides assistance to a telephone caller, usually in the placing of operator assisted telephone calls such as calls from a pay phone, collect calls , calls which are billed to a credit card, station-to-station and person-to-person calls, and certain...
s seated in front of a Teleregister board to supply commission houses with price and volume data. In 1962 two such batteries handled over 39,000 calls per day.
In 1955 Scantlin Electronics, Inc. introduced a competitive display system very similar in appearance but with digits twice the size of Teleregister’s, fitting into the same board area. It was less expensive and soon was installed in many broker offices.
Stock market quotation systems
In the late 1950s brokers had become accustomed to several problems doing business with their customers. To make a trade, an investor had to know the current price for the stock. The investor got this from a broker who could find it on his board. If the last trade (or the stock itself) hadn't made it to the board (or there was no board) the broker telegraphed a request for the price to that firm's "wire room" in New York. There, such requests would be forwarded to the floor of the appropriate exchange, where messengers could copy down prices at the locations where those stocks were traded, and telephone answers back to the wire room. Typical elapsed times were between 15 and 30 minutes just to inform the broker.Quotron
Jack Scantlin of Scantlin Electronics, Inc. (SEI) developed the Quotron I system, consisting of a magnetic tapeMagnetic tape
Magnetic tape is a medium for magnetic recording, made of a thin magnetizable coating on a long, narrow strip of plastic. It was developed in Germany, based on magnetic wire recording. Devices that record and play back audio and video using magnetic tape are tape recorders and video tape recorders...
storage unit that could be sited at a brokerage and Desk Units with a keyboard and printer. The storage unit recorded the data from the ticker line. Brokers could enter the stock symbol on a desk unit. This triggered a backward search on the magnetic tape (which continued recording incoming ticker data). When a transaction was located, the price was sent to the desk unit, which printed it on a tape.
The first Quotron units were installed in 1960, and were an immediate success. By the end of 1961 brokers were leasing Quotrons in some 800 offices, serving some 2,500 desk units across the United States.
Ultronics vs. Quotron
Quotron’s success attracted the attention of Robert S. Sinn, who observed its disadvantages: it could only give a last price. The opening price, high and low for the day, and share volume were not available. His system used a digital computer to read ticker data and track the additional data on a magnetic drum storage unit, also transmitting the data to other magnetic drums in major cities. Local drums sent data to brokerages who would access it through desk units.Sinn formed Ultronic Systems Corp. in January 1961. By the fall of that year Ultronics installed its first units in New York and Philadelphia, followed by San Francisco and Los Angeles. Ultimately Ultronics and General Telephone (which bought Ultronics in 1967) installed some 10,000 units world-wide.
Scantlin Electronics reacted immediately to the Ultronic threat. In early 1962 they began work on their own computer-based system and put it into service in December, 1962. It used four Control Data 160A computers in New York which recorded trading data in magnetic core memory
Magnetic core memory
Magnetic-core memory was the predominant form of random-access computer memory for 20 years . It uses tiny magnetic toroids , the cores, through which wires are threaded to write and read information. Each core represents one bit of information...
. Major cities hosted Central Office equipment connected to newly-designed Quotron II desk units in brokerage offices on which a broker could request, for any stock, price and net change from the opening, or a summary which included highs, lows, and volumes (later SEI added other features like dividends and earnings). The requests went to a Central Office, which condensed and forwarded them to the New York computer. Replies followed the sequence in reverse. The data was transmitted on AT&T's Dataphone high-speed telephone service. In 1963 the new system was accepted by many brokers, and was installed in hundreds of their offices.
At the end of each day, this same system transmitted stock market pages to United Press International, which in turn sold them to its newspaper customers all over the world.
Am-Quote
In 1964 Teleregister introduced the Am-Quote system with which a broker could enter code numbers into a standard telephone; a second later a pleasant (prerecorded) voice repeated the code numbers and provided the required price information. This system, like Ultronics’, made use of magnetic drums.Personal Computers
In December, 1986, Standard and Poor's introduced the program PC Plus which ran on personal computers and provided timely last, high, low prices and volume information for any stock, thus making "Desk units" obsolete. The personal computer could also provide data on individual customers, summarize trading, show broker address books, and so on.Over the years other companies wrote personal computer programs in competition with PC Plus, but they all dropped out along the way.
Mobile Applications
With the growing use of mobile phones as a means of accessing market information, companies have begun producing mobile applications that provide market data in real time to consumers. Such providers include BloombergBloomberg Terminal
The Bloomberg Terminal is a computer system provided by Bloomberg L.P. that enables financial professionals to access the Bloomberg Professional service through which users can monitor and analyze real-time financial market data movements and place trades on the electronic trading platform...
, CarryQuote
CarryQuote
CarryQuote is a privately-held company that provides integrated mobile and web access to every major exchange in real-time via smartphone, pad, or computer...
, and Delta Stream.
See also
- Stock MarketStock marketA stock market or equity market is a public entity for the trading of company stock and derivatives at an agreed price; these are securities listed on a stock exchange as well as those only traded privately.The size of the world stock market was estimated at about $36.6 trillion...
- Stock traderStock traderA stock trader or a stock investor is an individual or firm who buys and sells stocks in the financial markets. Many stock traders will trade bonds as well...
- Stock ExchangeStock exchangeA stock exchange is an entity that provides services for stock brokers and traders to trade stocks, bonds, and other securities. Stock exchanges also provide facilities for issue and redemption of securities and other financial instruments, and capital events including the payment of income and...
- Electronic tradingElectronic tradingElectronic trading, sometimes called etrading, is a method of trading securities , foreign exchange or financial derivatives electronically...
- Securities
- Stock brokers
- Ticker tapeTicker tapeTicker tape was the earliest digital electronic communications medium, transmitting stock price information over telegraph lines, in use between around 1870 through 1970...